In this paper we modeled and analyzed the ridge type InGaAlAs/InP semiconductor laser with lateral current confinement structure, and optimized the design for the ridge wave guide with the current confinement. We proposed and fabricated the ridge type InGaAlAs/InP laser with a cost effective selective undercut etching method and demonstrated the improvement of the ridge laser performance. This paper provides a solution to solve the cost/yield issue for conventional BH (buried hetero-structure) type laser and performance issue for conventional ridge type laser.